In interviews during the final months of his life, Steve Jobs gave some of his best advice on business as well as his harshest criticisms. Jobs’ most potent venom was aimed at once innovative companies that had lost their way by promoting the head of sales to the head of the company. Jobs’ most specific example of an innovative company gone bad was Steve Ballmer’s reign as Microsoft’s CEO.
“It happened to Apple when Sculley came in, which was my fault, and it happened when
Sales leaders fail as CEOs simply because of the nature of the role. The VP of Sales is supposed to find big game, big opportunities, big sales, and big money no matter what it looks like. It’s up to the VP of Sales to constantly present those opportunities to the CEO, who then filters them through the company’s capabilities. The CEO determines if the opportunity fits within the company’s strengths, core competencies, culture, and overall strategic vision. Some opportunities are executed on, but more importantly, the CEO decides which opportunities should be passed.Ballmer took over at Microsoft. Apple was lucky and it rebounded, but I don’t think anything will change at Microsoft as long as Ballmer is running it,” said Steve Jobs.
By promoting the VP of Sales to CEO, the filters for decision making are removed and every big money opportunity is jumped on. By not filtering opportunities, the business eventually splits into different directions, many of which are outside the company’s core competencies. There is no better example of a VP of Sales / CEO gone wild than Steve Ballmer’s reign at Microsoft: Office, Windows, Bing.com, Surface Tablets, Zune audio players, Skype, retail stores, Xbox gaming consoles, Nokia phone handsets, and on and on…
During Ballmer’s reign, Microsoft did grow at a pace faster than GE and IBM and was twice as profitable as Google, but the company has been left rudderless. The company doesn’t have enough consistency in what it does and how it does it. Microsoft has no unifying meaning of its existence.
Microsoft’s new CEO, who took over for the retiring Steve Ballmer in February, understands that the company is desperate to find a unifying message. In his first company-wide email as CEO, you could sense that Satya was trying to create that unifying message on his own. In his email, Satya wrote phrases such as “contribute to the world”, “empowers the world”, “software powered world”, “change the world”, “make the world a better place”, and “best company in the world.” Satya wrote the word “world” thirteen times in his email to Microsoft employees. He also used the world “empower” six times and the word “change” four times. For the record, the words “technology” and “software” were each mentioned just three times.
While Mr. Nadella is trying his hardest to unify Microsoft employees around a cause greater than themselves (“Empower the World!”), his efforts will likely fall short because “empowering the world” is not Microsoft’s true calling – at least not anymore.
How does the Xbox or Surface tablets empower the world? How is the world empowered through Microsoft retail stores? (Hint: they don’t empower the world).
Microsoft’s leadership team needs to do some deep soul searching in the months to come. Satya and his team need to look at all of the different parts of the 100,000 person Microsoft business and find a unifying theme of what exists today. The exercise may reveal that only some of the company’s endeavors are similar and fall in-line with Microsoft’s core competencies. The introspective may also reveal that Microsoft has been pretending to be something that it isn’t and needs to get back to its roots.
In a recent interview with CRN, Satya was pressed for his opinion on Microsoft’s purchase of Nokia, a Ballmer decision that he himself was against. “We are a software company at the end of the day.”, the new Microsoft CEO replied.
“We are a software company.” There it is.
Microsoft’s long term value and growth may hinge on Mr. Nadella’s ability to identify his company’s unifying theme, “We are a software company”, and weave it into the DNA of Microsoft’s vast array of businesses. It is daunting task, and Mr. Nadella may have to cut some businesses (tablets, retail stores) to cure Microsoft, but it absolutely has to be done.
“We are a software company.”
He has a start.